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TSA Reports Post-Pandemic Record Screenings: 3 Airline Stocks To Watch

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TSA Reports Post-Pandemic Record Screenings: 3 Airline Stocks To Watch

Airline traffic is one of many industries that has been hurt by the Covid-19 pandemic. TSA screenings are up and airlines that have reported earnings are pointing to strong recoveries and bookings.

TSA screened 1,703,267 people on Friday, May 7, which was the highest total since March 12, 2020. The U.S. declared COVID-19 a pandemic on March 11, 2020.

Traffic was hitting the highest figures in a year with 1.71 million passengers screened by TSA. on Sunday, May 9.

Here is a look at three discount airlines that have reported strong recoveries and could benefit from continued increasing passenger figures.

Spirit Airlines: In its first-quarter earnings report, Spirit Airlines Incorporated (NYSE: SAVE) reported strong demand over the last weeks in April and an improvement in bookings going forward.

The company is guiding to have positive adjusted EBITDA margins for the full fiscal year.

Spirit expanded its operations in New York and Los Angeles along with adding new services throughout the U.S. Spirit has one of the youngest fleets in the country and serves the U.S., Latin American and Caribbean markets.

Shares trade at $34.86 compared to a 52-week high of $40.77 and could trade higher as the company is recognized as one of the low-cost airline providers that could benefit most from strong passenger numbers.

“We continue to believe we will be among the first U.S. carrier to reach sustained profitability, CEO Ted Christie said in the first-quarter earnings report.

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JetBlue: First-quarter revenue was down 61% year-over-year for JetBlue Airways Corporation (NASDAQ: JBLU). The figure came at the lower end of previous guidance, hinting at strength in the upside. The company reported sustained momentum that started in mid-February. The company also said it was breakeven on cash from operations in the month of March.

Shares of JetBlue trade at $19.40 versus a 52 week high of $21.96.

“We saw a bigger than expected step up in demand for leisure travel beginning in mid-February,” JetBlue President Joanna Geraghty said.

Allegiant Travel: The first domestic carrier to restore capacity to pre-pandemic levels is Allegiant Travel Company (NASDAQ: ALGT) according to the company.

First-quarter revenue of $279.1 million was down 32% year-over-year. The company reported momentum picking up. Capacity was up 3.1% in the first quarter compared to 2019 figures. March and April bookings exceeded 2019 figures as well.

Allegiant added 50 routes in the first quarter, bringing it to a new total of 580 routes in 129 cities.

Shares of Allegiant trade at $221.63 versus a 52 week high of $271.29.

The ETF: Another way to play the strong TSA screening numbers is the U.S. Global Jets ETF (ARCA: JETS). The ETF holds stakes in many of the largest global airline operators. The ETF has stakes of 4.0%, 3.9% and 3.6% in JetBlue, Spirit and Allegiant, respectively. The ETF has its largest positions in large airline companies like Southwest Airlines Co (NYSE: LUV), United Airlines Holdings Inc (NASDAQ: UAL), American Airlines Group Inc (NASDAQ: AAL) and Delta Air Lines, Inc. (NYSE: DAL) at 11.2%, 107%, 10.6% and 10.1%, respectively.

The ETF is up over 100% in the last year,  but could continue to rise with a recovery of the airline industry coming faster than many expected.

(Photo: Avel Chuklanov via Unsplash)

 

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